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Mental health center to get $900K grant for lease on building

Financially struggling Colorado West Mental Health is getting help from some deep pockets.
Mesa County is using a $900,000 Colorado Department of Local Affairs grant to obtain a 40-year lease for one building, a hospital facility known as building D, on Colorado West’s campus on 28 1/4 Road, north of North Avenue.

The Mesa County Commission was told last week about the recently struck deal. An official contract is expected to be approved by the commission at its next public meeting.

The Colorado Health Foundation also is throwing money at Colorado West, which has a $10 million debt.

JP Morgan, a financial services firm, holds a $10 million deed of trust with Colorado West. The Colorado Health Foundation negotiated the amount down to $6.9 million, said Angela Luedtke, an assistant county attorney. In return Colorado West will pay the foundation $150,000 a year for five years, Luedtke said.

Once the $750,000 is paid “they will extinguish the rest of the deed,” she said. And then the Colorado Health Foundation will step out of the picture.

The county will lease building D back to Colorado West for $100 a year, Luedtke said.

If for some reason Colorado West folds and is unable to pay back the county or the foundation, the county would still own building D until 2049. The new operator of the facility, assuming there would be one, would have to negotiate a lease with Mesa County.

“This has been an interesting deal to put together,” said Jon Peacock, county administrator.

And it will be a continuing struggle to keep Colorado West performing at a high level, said
Sally Schaefer, hospital administrator at Colorado West Psychiatric Hospital and former director of Hilltop Community Resources.

Regular hospitals anticipate 5 percent of their patients will not pay their bills, whereas mental health hospitals plan for 40 percent no pay, she said.

“That is because our clients are mentally ill. It doesn’t take a rocket scientist to figure it out,” Schaefer said. “Financially it is an albatross, and we have to figure out how to right our ship.”

On the positive side, the facility went from being labeled the worst mental health facility in Colorado by state auditors a year ago to the best in Colorado this year, Schaefer said.

Colorado West, which opened its doors in 2005, was set up wrong from the outset, said Schaefer, who took over as administrator in May 2008 when Colorado West’s management and financial problems came to a head. One of the psychiatric buildings was closed, and the facility went from having 32 beds to 16, staff was cut, and new staff was brought in.

“We have corrected the egregious mistakes, and now we are building a competitive business,” Schaefer said.

The county’s involvement with Colorado West does not end with its investment at its 28 1/4 Road facility. Earlier this year, the county purchased another of Colorado West’s buildings on the corner of South Avenue and South Seventh Street for $300,000.